Winning Strokes

The Indian stock indices tanked ferociously on the last two days of Trading on renewed fears of the rise in Covid-19 cases,C in China and elsewhere. On last Friday, the BSE Sensex closed at 59,845.29 down 980.93 points (-1.61%), while the Nifty ended the day  at17,806.80 down by a massive 320.55 points (-1.77%). However, the Covid-19 fears were too much exaggerated and the selling basically came from the panic stricken retail investors, since DIIs were net buyers to the tune of Rs.3398.98 Cr, while FIIs net sold Rs.706.84 Cr. This week we are expected to resume, 2nd phase of the much anticipated rally which fizzled out last week. The Indian media channels should be careful before showing events on sensitive issues. Their irresponsible behaviour in the last week caused immense pain to the retail investors.

However, the things are not that gloomy as was projected by the media channels last week. We're probably at the last phase of US rate hike cycle.

This month, the Federal Reserve approved a half-point interest rate increase, a lesser increase than in prior months and an acknowledgement that inflation is finally reducing. The increase represents a reversal for the US central bank, after an unprecedented year that included seven consecutive rate hikes as part of an aggressive push to try to cool down the inflation.

Policymakers also predicted that PCE inflation, the Fed's preferred price index, would remain above 2% until at least 2025. Further predictions showed that expectations for the health of the US economy were deteriorating, with Fed members now forecasting that unemployment will rise to 4.6% by the end of 2023 and remain there through 2024. This is 0.2 percentage point higher than the 4.4% rate predicted in September and much higher than the current 3.7% rate. points higher than the 4.4% rate they were expecting in September and significantly higher than the current 3.7% rate. This again shows that we're perhaps done away or near the last phase of the aggressive rate hikes by the US Fed.

#The Sensex is expected to gap up today by at least 300 points. I'm expecting a rise of 700+ points today, as the day progressed, after the Sensex nosedived due to an artificial selling coming primarily from the scared retail investors.

#Buy the Stock of Piramal Pharma Ltd (Rs.114.55), as the company is now also into Vaccination space. According to the media reports, Piramal Pharma Limited (PPL) made an investment or Rs.101.77 Cr in Yapan Bio Pvt Ltd ("Yapan") of Hyderabad, India, augmenting the capabilities of its Contract Development and Manufacturing Organization (CDMO) business, Piramal Pharma Solutions (PPS). PPL holds 27.78% equity stake in the company as a result of this investment. Yapan Bio provides process development, scale-up, and cGMP compliant manufacturing of vaccines and biologics/bio-therapeutics, including high containment product classes (up to BSL-2+), recombinant vaccines, RNA/DNA vaccines, gene therapies, monoclonal antibodies, therapeutic proteins, and other complex biologics. 

Arvind Sharma, Partner at Shardul Amarchand Mangaldas & Co who tracks the pharmaceutical sector says: “Several new products are lined up for approvals, and the pharma sector is securing benefits including on account of digitisation, use of AI and increased R&D. All of this, and recent changes in the global economic and political situation, should enable continuity of excellent performance in the Indian pharma sector, and we have a positive outlook for growth in the next year as well".

Piramal Pharma Ltd is currently a big public corporation in the pharmaceutical sector, following its demerger from the parent company, Piramal Enterprises. Piramal Group has rebuilt its pharma business after selling its domestic formulations business to Abbott in 2010 (which accounted for about 55% of FY10 sales of Rs.3,670 crore). The billion-dollar revenue mark is already within striking approach.

Interestingly, while the pharma and healthcare sectors have had mixed successes in the recent past, the industry appears to be on the right track in terms of development and growth.  Buy the share of Piramal Pharma, with a target price of Rs.210/221.

#D B Realty Ltd (Rs.87.30) is another firm to keep an eye on. On September 16, its wholly-owned subsidiary, Esteem Properties, agreed into a non-binding term sheet for the sale of its land adjacent to the ITC Grand Maratha Hotel in Andheri East for Rs.480 crore. The good news can come at anytime, since the deadline was three months from the date of declaration.

The firm's portfolio includes over 100 million square feet and 628 acres of prime property, mostly in Mumbai. In addition, the company has collaborated on several projects with Adani Goodhomes. It's also a takeover candidate of the Adani Group, owned by Gautam Adani, the Asia's Richest Man.

The real estate firm has a portfolio comprising over 100 million square feet and 628 acres of prime property, mostly in Mumbai. Also, the company has tied up with Adani Goodhomes on various projects.

Promoters, including Vinod Goenka family, Balwa family and a few others, have close to 69% stake in the Mumbai-based DB Realty.

Once the news of land sale comes, the stock will atleast double from the CMP.

#Buy the stock of Tata Steel Ltd (Rs.102.25), as the current NSA government is excepted to take more measures to boost the steel sector. 

In 2022, the centre took various measures to support the steel sector by removing the export duty on steel items and extending export benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to products of iron and steel for a specified period. These measures will help the domestic steel industry increase its share in the global market. But for a price target of Rs.131/135.

However, this government always works at a lag and has a pathetic economic policy. The choice of Niramala Sitaraman, instead of Dr.Subramanium Swami or Piyush Goyel, was also not correct. Though Niramala Sitaraman is a very hard working lady, but she still is a new comer in the FMO and that shows up in her speeches. But her appointment to the post of FH fits the bill for Narendra Modi who wants mediocrity in his ministry; so that the ministers don't become a challenge to his chair -- which he has clung so tightly since his occupancy of the Delhi chair. Narendra Modi is a misfit from the day he took over. It is time that he relinquished the chair of the PM before the public pulls him down in 2024. 

By the way, in October, India became a net importer from being a net exporter earlier -- this is what Narendra Modi government's policies are all about.

#The stocks like Zomato Ltd (Rs.53.65) and RTN Ltd (Rs.3.90) may show sharp rebound today, following of the recession of Covid-19 pandemic fear.  Both the companies are of high pedigree and only thing you need to do, to earn handsome returns over a period, is to hold on to the scrips.

#The stock of FCS Software Solutions Ltd (Rs.2.50) should be accumulated in market dips, after the company reported consolidated net profit of Rs.0.53 crore in Q2 FY23 as against net loss of Rs.0.02 crore in Q2 FY22. 

On a consolidated basis, net sales rose 12.58% to Rs.9.13 in Q2 FY23 over Q2 FY22. Revenue from India business stood at Rs.4.19 crore (up 9.11% YoY) and revenue from US business were at Rs.4.94 crore (up 15.69% YoY).

Profit before tax (PBT) stood at Rs.0.73 crore in Q2 FY23, higher than PBT of Rs.0.05 crore in Q2 FY22. This is a turnaround story.

#The stock of Wockhardt Ltd (Rs.223.40) and BPL Ltd (Rs.58.70) can also be accumulated in market dips, for targets of Rs.241/245 and Rs.71/76/84 respectively.